DBoys wrote:"I can see how the quote you referenced can sound confusing, so let me try to explain what I meant with a similar example. I also think you're missing my original question."
I did understand your questions. But you're getting bogged down in minor stuff, and losing sight of what you're seeking with this math, which is (as you have said) to see if the math can help you understand WHY teams don't go ahead and do an over-36 deal. Right? (Or, your exact words - I am merely trying to understand quantitatively why an over-36 contract is such a disadvantage to the player or team signing to make it so that we have NEVER seen a single NBA deal of this sort in history ever.)
So, I simply ignored the side irrelevancies, and cut to the bottom line in my answer.
"Year 1 on an over-36 deal is a cap killer" is your answer. That is clear when you do a comparison, so you have to compare the numbers both ways PERTAINING TO THE CAP FOR THE SUMMER OF DECISION, and looking at the non-over-36 route is part of the exercise. The later years might get adjusted after the fact if they were to get that far, but they don't, because the possibility of offering an over-36 deal was killed by the impact on the cap when it's being written. And also, of course, by the fact that they could write the deal the easy way, not mess with their cap, and still eventually do the same number of years if they eventually want to.
Part of the equation is one of practicality or expediency, where the fact is that teams worry about what is in front of them (how much cap room can they use now, and what players can they get for it) and don't really care if they have the potential to, in the right scenario, waste some now but regain it later.
Once you realize that, then you realize (as I noted earlier) that trying to figure out all the variations and permutations of what happens in years 2 and later is irrelevant, an exercise in chasing purple unicorns, since no such deal is going to get written in the first place.
I think you're getting too caught up in the semantics of when I wrote
"have to be reduced…". When I wrote
"…have to be reduced…", I was comparing the
4-year Over-36 rule contract to the "Control"
4-year max contract that is not subject to the Over-36 rule. I did this because I was trying to understand BdeRegt's comment:
"This would cause the first year to go over the max amount. In order to make the contract work, the overall value would have to be reduced to fit within the max contract values for those shorter years."That was my
original issue, which I now understand. In other words, I was unsure if the Team Salary after deferring, stayed at $40M, or does the Team Salary have to be reduced to the Player's $30M max to make the contract legal (referring to an example in my last post).
Again, I have acknowledged in the google doc that the player should not sign the 4-year Over-36 rule contract because the player does
"NOT HAVE TO" to reduce their earning potential from $120M to $90M ($22.5M x4), which is your point and I agree.
I am in agreement with you and realize your points (even that
"chasing purple unicorn" idiom which was equally confusing as the Over-36 rule. Urban dictionary's definition #4 for "purple unicorn" had me cracking up.).
Below, I labeled the scenarios you gave and labeled the Tables in the doc for reference:
https://docs.google.com/spreadsheets/d/1affWfyO2ZrwOYASMp4Zk1jx5Ur5n92frSBwHMl_hXSI/edit?usp=sharing#2 a) If you do a 4 year deal (15-15-15-15) followed by a 1 year deal (15), you will use 20M in cap room this year.
#2 b) The biggest starting salary you can offer him for the 4 year deal would be 22.5M.
#3 a) If you do a 5 year deal (15-15-15-15-15), you will use 25M in cap room this year.
#3 b) The biggest starting salary you can offer him for the 5 year deal would be 18M.I also did take into account Year 1 of the summer of decision.
If you missed the bolded enlarged numbers in the doc, it is spelled out explicitly below:
Scenario #2a) Shows the $5M disadvantage to the Team's Salary in Year 1 (Player is paid $15M, Team Salary 1st Year: $20M)
Scenario #3a) Shows the $10M disadvantage to the Team's Salary in Year 1(Player is paid $15M, Team Salary 1st Year: $25M
Scenario #2b)
Shows the $7.5M disadvantage to the Team's Salary on Year 1 (Player is paid $22.5M, Team Salary 1st Year: $30M
It also shows, the $7.5 M disadvantage to the Player's Salary on Year 1 (Player is paid $22.5M, Player's Max: $30M)
Scenario #3b)
Shows the $12M disadvantage to the Team's Salary on Year 1 (Player is paid $18M, Team Salary 1st Year: $30M
It also shows, the $12M disadvantage to the Player's Salary on Year 1 (Player is paid $18M, Player's Max: $30M.
Quantitatively, I have figured out why (with your help, thank you.) an Over-36 contract is such a disadvantage to the player or team signing.
My Other ramblings:I did not originally ask what are the potential advantages of the Over-36 rule because as you stated, the
moot nature of the idea. On the surface, I did not think there would be any because of what it was intended for. When I started to learn the deferring and shifting of salary, it got me thinking to fully investigate the Over-36 rule beyond Year 1 for any potential unintended advantages (which I believe you see as
"chasing purple unicorns" that don't exist).
Maybe looking into Year 2 and later, turned out to be an exercise of
"chasing purple unicorns", but what if it matters to a rebuilding team that has minimal chance of winning a title now. What if it would be to their benefit to "
waste some (cap room) now but regain it later". For example, if you look at Scenario #3a) and instead you start with a Player at age 35 in Year 1, a team can potentially pay and lock-in a solid 37-year old role-player in the $15M market range, but only have a Team Cap Hit of about $11.1M in Year 3. That's an extra $3.9M they can pay to another role-player on Year 3. Year 3 would be a year where they could arguably have a better shot at a playoff spot or even a title. Of course they would "waste" $10M in cap room in Year 1 (
"PERTAINING TO THE CAP FOR THE SUMMER OF DECISION"), but what if the team is below the Salary Cap Floor and has excess cap room to spend anyway. A team under the Salary Cap Floor would have to cut a supplemental check to all of their players on the roster for nothing, so why not "kill" $10M in cap room in Year 1.
Simply focusing on
"what is in front of them" are the teams' prerogative. I can see the
practicality or expediency argument of the equation because actual General Managers want to keep their jobs and have the pressure to win now and not in Year 3. What separates a mediocre GM and a good GM in my opinion, is that a good GM would not only focus on
"how much cap room they use now and what players can they get for it", but they would also look at potential possibilities. It doesn't hurt to try to figure out a few variations and permutations of what happens in years 2 and later in an Over-36 rule contract because it's perfectly legal, within the confines of the 2011 collective bargaining agreement, and just might be marginally advantageous.
If a certain road goes over a cliff, no one cares what the road looks like at the bottom of the cliff ? Say that to the many who admired the Grand Canyon or even hiked down it (just to humor you).
